Brokerages initiate coverage on these 7 stocks. Would you buy any?
, ETMarkets.com|
The stocks range from speciality chemicals and internet to hotels, housing finance and glassware. Out of the seven, six have a 'buy' rating, and one has a 'hold' tag. Here's what brokerages said about their new picks:
Agencies
Target Price: Rs 860
The company's global market leadership in various products across acetyls and pyridine derivatives enables it to move up the value chain in CDMO, diketene derivatives, agro actives & advanced intermediates, pharma, cosmetic-grade vitamins, vitamin premixes etc.
The brokerage expects revenue/ EBITDA CAGR of 26 per cent/27 per cent in SPCM and 11 per cent in NHS, aided by capex outlay of about Rs 1,500 crore (of total Rs 2,050 crore) over FY22-25E (Rs 1,300 crore for SPCM and Rs 200 crore for NHS segment).
iStock
Target Price: Rs 1,495
Affle operates in a large TAM ($65 billion in 2021), and eMarketer expects the stock to grow by 30 per cent over 2021-25, driven by secular drivers of rising internet/smartphone/e-commerce penetration, more data traffic across EMs and more time spent by digital consumers on mobile.
We expect Affle to maintain its current global market share of 0.17 per cent and grow its revenues at 32 per cent CAGR over FY22-25 led by multiple moats like patents, platforms, first mover advantage in India and a few other EMs, focus on high growth category of clients (such as e-commerce, ed-tech, food tech, gaming, healthtech) and vernacularization thereby catering to diverse cultures across its key markets like India, SEA, MEA and LatAm.
ET Bureau & Agencies
Target Price: Rs 1,020
HomeFirst has levers to mitigate the potential margin compression with a sustainable improvement in cost ratios. We expect the company to reduce its opex/average AUM to 2.5 per cent by FY25. It is gradually normalizing its asset quality, and we model benign credit costs of about 30 basis points to improve RoA.
Key downside risks include a high business concentration in India’s best affordable housing states, vulnerability to external shocks thereby restraining access to liquidity, and likely sharp contraction in spreads/margins due to its inability to pass on higher borrowing costs and continued aggressive approach by banks and HFCs.
ET Bureau & Agencies
Target Price: Rs 463
It has successfully established the brand ‘Borosil’ over the years and is now ready to reap benefits by leveraging it. Its ‘Larah’ brand has 25 per cent market share in opalware category and is gaining market share. It earmarked capex making 2x capacity for Opalwares amid strong demand. It expects to achieve an 18% EBITDA margin for the scientific division.
Factors including economies of scale, best-in-class offerings, capital expenditures to build capacities and improved tax rates are likely to improve the company's financial performance and balance sheet.
Company poised to deliver robust performance over FY23E-25E with 27 per cent revenue growth, operating profitability to scale by 150 bps from 17 per cent in FY22, this driving earnings growth of 31 per cent and ROE/ROCE of 18.3 per cent/ 25 per cent.
iStock
Target Price: Rs 1,700
MapMyIndia is the leading digital mapping operator in India. Its B2B and B2B2C focus make it less visible vs B2C focused Google map. Yet, we feel that the revenue model based on fees charged per period is superior to Google. It estimates 39.2 per cent/42per cent revenue and EBITDA CAGR over FY22-FY24.
In the context of business in India, MMI has clear advantages as it is not easily replicable and proves to be a high barrier to entering the map and navigation business in India. Its diverse use of maps across platforms, products and applications is much more than those of its peers.
iStock
Target Price: Rs 360
The Indian Hotels Company Limited (IHCL), with subsidiaries, offers a fusion of warm Indian hospitality and world-class service. These include Taj – the iconic brand for the most discerning travellers; SeleQtions- a named collection of hotels; Vivanta – sophisticated upscale hotels; and Ginger – revolutionising the lean luxe segment.
It expects IHCL’s RoIC to improve to 13.2 per cent in FY24E. The company’s RoIC is currently dragged by two major investments of Searock investment and international subsidiaries. IHCL is looking for a strategic partner to offload a stake in Searock Investment while the company is on track to monetize a few international assets.
Agencies
Target Price: Rs 335
Laxmi Organics is also diversifying into Fluorochemicals through the asset acquisition of Miteni, Italy (relocating to India; to be commissioned in H2FY23) and capitalising on its R&D and portfolio capabilities (over 100 products with an initial basket of 10 products in R&D and scale-up stages).
Its thrust to rejig SI product basket by ramping up newer products (higher margin) and rising share of high-value products like Esters (end use in pharma) augur well for operating margins. The brokerage expects EBITDA to grow at 22 per cent CAGR, topped with FI earnings commencing in FY23.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Agencies
